Morris Hubbartt: Silver Set to Dramatically Outperform Gold

This is a ratio chart of silver versus gold, and it suggests silver is set to dramatically outperform gold, in the intermediate term. RSI is close to confirming the latest CCI spike, and the Stokes oscillator at the bottom of the chart is flashing a significant buy signal.
A bullish Doji candle recently occurred, just outside of the lower Bollinger band. No technical pattern has a 100% success rate, but a Doji is highly dependable.The silver bears are treading on thin ice here, and the bulls are looking good.

I want to focus your attention on the Dow, because most investors believe that resolution of the fiscal cliff could give stocks a lift. Unfortunately, this chart suggests that after a tiny rally towards 14,000, there could be an enormous correction that takes the Dow to as low as 11,800.

The sell-off could begin very quickly, so the next rally should be used to lighten up on long positions. Risk takers should short the market as it moves towards 14,000.

Note the enormous wedge pattern in play. My minimum downside target is the outer Fibonacci arc, which is near 12,200.

Gold Spike Time Chart

On the charts of numerous precious metals sectors, the CCI spike indicator is in bullish play. I use it to measure the intensity of upward or downward movement. Typically, spike movements indicate the end of a bearish move, rather than the beginning of a new bullish one.

Once the spike has formed, investors should look for RSI to confirm the CCI spike, by moving higher.

Still, no system is perfect. Investors should strictly limit the amount of capital deployed when buy signals are generated.

Accumulating gold may not sound “sexy” at this point, but it is a very solid strategy.

GDX Spike Action Chart

Watching price go lower, as indicators offer positive divergences, is a small consolation to most gold stock investors today. It’s important to remember that entire farm crops begin with the planting of a seed, and so does the growth of a portfolio.

If you’re low on cash, simply hold your positions.

The latest CCI spike occurred in mid-November. Now, RSI is beginning to confirm that spike, and there is a significant bullish divergence with the price of GDX in play. The size of the divergence suggests that a major bull leg is beginning, for most gold stocks.

GDX Swing Trade Chart

I allocate 30% of my GDX risk capital to swing trading. Note the positive divergences on the slow “Stokes” and the Ultimate Oscillator.

I’m very excited about a volume pattern that is now in play, and I’ve highlighted what I believe are two key “transitional” bars. The tide is slowly turning, in favor of the bulls!

GDXJ Technical Spike Chart

I’ve highlighted five examples of the CCI buy spike signal on this chart, and four of them were followed by decent rallies. No trading system is perfect. Note the red circles on the chart. That’s one example of a signal that was a “dud”.

I am projecting a solid rally occurs soon. GDXJ should acquire my $24.72 target early in January, after a brief rest near resistance at $22.22.

GDXJ Swing Trade Chart

70% of the capital earmarked for investment in the juniors sector should be held as core positions. The other 30% can be used for swing trading.

There are important bullish technical divergences in play now. Both the slow “Stokes” and the Ultimate Oscillator are predicting much higher prices are coming soon! Swing traders can book light profits near $21.50.

Silver Versus Gold Chart

This is a ratio chart of silver versus gold, and it suggests silver is set to dramatically outperform gold, in the intermediate term. RSI is close to confirming the latest CCI spike, and the Stokes oscillator at the bottom of the chart is flashing a significant buy signal.

A bullish Doji candle recently occurred, just outside of the lower Bollinger band. No technical pattern has a 100% success rate, but a Doji is highly dependable. The silver bears are treading on thin ice here, and the bulls are looking good.

The best trade for 2013 could turn out to be buying silver now.

SIVR (Silver Proxy) Swing Trade Chart

This is a ratio chart of silver versus gold, and it suggests silver is set to dramatically outperform gold, in the intermediate term. RSI is close to confirming the latest CCI spike, and the Stokes oscillator at the bottom of the chart is flashing a significant buy signal.

A bullish Doji candle recently occurred, just outside of the lower Bollinger band. No technical pattern has a 100% success rate, but a Doji is highly dependable. The silver bears are treading on thin ice here, and the bulls are looking good.

The best trade for 2013 could turn out to be buying silver now.

SIVR (Silver Proxy) Swing Trade Chart

Physical silver bullion is one of my favorite places to put new investment capital. On this chart, the RSI oscillator has just poked above the oversold line at 30, producing a nice buy signal.

CCI, MACD, and the slow Stokes are also in a position to fuel a big rally, almost immediately. A substantial move higher by silver would be a great start to the new year, for the entire precious metals sector!

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It seems that Sinclair, Organ, Willie and Hubbart all opine that precious metals will go up soon, solidly and in early 2013. Their reasons are pretty much in alignment but for largely different reasons. I can’t tell if this divergence of reasons and convergence of direction mean they are correct. If people agree on an event but for different reasons I hope these differing reasons will still be accurate overall. One thing that will likely happen is the drop in equities for many reasons, not least of which will be substantial declines in earnings for the fourth quarter. We are in a recession again, as if we really got out of the last one. The ECRI computations indicate the recession started in September 2012 and is likely to get worse in 2013.
A large drop in the equity markets will probably drag down PM prices for s short time due to the liquidation of all asset classes. But try to find silver or gold during the downdraft. Once the short term price drop runs its course, equities probably won’t recover quickly but PMs should come back sharply in April to May time period. QE 4 appears to have had no effect on prices other than a quick bounce in the DOW. QE4 was not designed to reduce unemploymen, help the economy or stabilize the inflation rate to 2%. It was another feeble attempt to keep mega banks alive a little longer and monetize our rapidly rising national debt. All these measures will not work in the long pull and scarcely work in the short time frame. Europe is much weaker than us and their QE measures last 3-4 weeks at most even when $1 trillion Euros is thrown at the problem. We are throwing trillions at ours and sliding down the slope at an increasing rate. For the life of me I can’t see any light at the end of the tunnel or any asset class other than precious metals that will prevail.

A large drop in the equity markets will probably drag down PM prices for s short time due to the liquidation of all asset classes. But try to find silver or gold during the downdraft. Once the short term price drop runs its course, equities probably won’t recover quickly but PMs should come back sharply in April to May time period.

I agree with this. Look at the futures. Bloomberg has the DOW at 12777 or down 226 pts since the close on Friday. I also believe that the PM haven’t hit bottom. Personally it doesn’t matter if silver is at 26 or 30. As many people on this site had said, price is really meaningless. I guess if I was rich and bought in huge volumes, a 3 dollar difference in price would make a difference. I not rich so I don’t give a shit. I buy a little at a time. The fundamentals will just continue to get better as the world is set more on fire after each passing central bank intervention. They are trapped and there is no way in hell that I’m selling at any price. I hope it goes lower. I hope it goes to 5 bucks. That is a good way to stimulate housing for us PM buffs. We will need a bigger house to store all of our metal in if they drop the price further. I will need a 5000 foot, 5 bedroom house if silver goes to 5 bucks. I will use 4 of the bedrooms to stack my metal. Thank you Fed and other criminal central banks. Keep up the good work.

“We are in a recession again, as if we really got out of the last one.”

I have to disagree with this. IMO, we are not in a recession and haven’t had a recession since 2001-02. What happened in 2008, and from which we have yet to recover, is called a depression. What else would one call it when it is so widely recognized as the worst economic calamity since The Great Depression? If not “Great” then at least still a depression. But, we won’t use the “D” word because that could cause a panic and a sheeple stampede, and you know how much the elite hate if when the sheeple stampede. Don’t want a recurrence of that danged French Revolution, when so many elites lost their heads.

As to the QEs, I find a remarkable similarity between them and the PM smack-downs that keep hitting the gold and silver markets. In fact, it is taking more and more manipulation to achieve less price change that lasts for a shorter time each time they engage in either QE or price attacks via dumping lots of paper metals. The law of diminishing returns is tearing both groups of elites a new one… and good on ’em too!

“Europe is much weaker than us…”

Yes, they are, because they have not even stabilized their banks so far and we have. Additionally, our companies have gone through the period of time when they get lean, mean, and ready for the next up cycle. In economic terms, the US is about 4 years ahead of the EU and that could matter hugely if we can pull out of the economic dive we are in and get back to cruising altitude. If not, then there is gonna be one helluva hard landing that ends with a world class SPLAT!

“For the life of me I can’t see any light at the end of the tunnel or any asset class other than precious metals that will prevail.”

I agree with that as far as asset classes go but suggest that a small acreage that can grow enough food to feed our families and produce enough extra for trading purposes is also a very fine asset to have.

You are absolutely right. Charts are rendered meaningless in this environment. Zerohedge had a really good article about people making predictions and most have a agenda or no accountability. It’s not that the experts or pundits are wrong but they never own up to their predictions of being off. Here is the link. http://www.zerohedge.com/news/2012-12-28/2012-year-living-dangerously-reviewThe world is too complex, too big, too corrupt, too lost in theories and delusions, and too dependent upon too many leaders with too few brains to be able to predict what will happen next. What I’ve learned is that “experts” usually have an agenda. Their predictions are designed to convince you to buy the stocks they recommend or purchase their newsletter. Many of these “experts” work for Wall Street, the corporate MSM, a political party or corporate interest. Half of the “experts” represent the status quo and want the masses to think everything is just fine and will steadily improve. The other half are fear mongers that want to scare you into buying their products with predictions of impending collapse at any moment.
When I eventually got to the predictions, I realized that a monkey throwing darts could have done just as well. If I was one of those “experts”, I’d say that I wasn’t wrong, I was just early. Of course, that is a cop-out. Being early is the same as being wrong.
Just because someone says gold is going to 10k or silver to 500 bucks doesn’t mean shit. All these guys like Charlie McGrath, Christopher Greene, Fabian for Liberty, Greg Mannarino, Alex Jones and all the rest just read the same BS from the same sources and run their mouths like they are experts of finance, geopolitical history, social matters, science and many other topics. They all have a agenda of selling some bullshit newsletter, pay website, or hits on youtube. They are not totally bad but they are hypocritical when it comes to being accountable. They bash the MSM about propaganda. I agree that the MSM is full of shit but so are these guys in some ways. All these articles and videos need to be taken with a grain of salt. Do your own research and formulate your own opinions. Just because it’s on RT, Zerohedge, or your favorite youtube wanna be star doesn’t validate any information. Look at their predictions. Have they been right? Are they accountable for what they have said? Most are not and they hide it or don’t bring up their past. This article at least tries to come clean. It’s impossible to be 100% correct of the future moves of where the world is going but these “experts” are usually full of shit.

Thank you. I have been really critical of some of these guys(Greg Mannarino) but that doesn’t mean that he is completely wrong. The problem is that they are all selling something. That is a big red flag. Personally, I think my ratio of being right about the global markets is really horrible. I was in the camp that gold and silver would skyrocket in 2012. I underestimated the manipulation. I didn’t think the Fed and the other criminal central banks could hold this together as long as they have. Well, I was wrong. I also don’t blame these “experts” for being wrong with their predictions. How could anyone predict anything with any accuracy with these markets? My main problem is that most don’t ever say that they missed these calls. Look at Mannarino with his so-called “double down” call on silver since Dec. 3rd. Silver has lost 12% since that time and he has been telling his audience to trade paper ETF’s. Seriously, how can anyone take this moron as being a “expert?” No disrespect to Silverdoctors but this particular website has linked his crap as being a market expert. Really? Please do a little bit of research on these so-called “experts.” Look at Christopher Greene. Wow, everyday the world is going to end. Just complete propaganda and total hype. Fabian for Liberty, the same thing as Greene. They actually interview each other on their channels and radio shows as people who know the markets and politics. Based on what? Fabian is a real estate agent or in the real estate morgage industry and he understands global markets.? This gives him credibility? He has never been in finance for god’s sakes. Shit, Mannarino is a physician assistant in Vegas and he is giving advice of how to produce “stupid amounts” of money in shorting the markets and in ETF’s. If he was such a market timer or financial wizard don’t you think he would actually be in the industry of finance? These guys are complete and total frauds! As for the chart analysis, they are in the same category as Tarot card readers or freaks that think they can tell the future by looking into a crystal ball. Charts are meaningless because the free market is completely dead. There isn’t a honest interest rate! It’s just manipulated numbers that are medicated and rigged to represent a rate or yield to borrow money. It’s not fucking real! Therefore, how can any transaction be real if interest rates are not real? Every transaction is based off some kind of interest rate. If rates are rigged the whole system is rigged. Every heard of Libor scandal? That is all you need to understand about the markets. Ok, that’s all. I’m getting worked up. Have a good day.

Nice post Duckvision.
Like you I unsub’ed to both Christopher Greene and Fabian for Liberty some time ago; There was just never anything but fear coming from them, well fear and self promotion; Haven’t pulled the plug on Greg Mannarino.
There ALWAYS seem to be plenty of hype out there. “Silver to the Moon!” “Silver to $650!” I’m just a simple stacker. Be just fine with me if I’m able to pick up ASE’s in the $30 neighborhood this Septemeber…..

I dislike articles like this one. I don’t have the time to spend looking at a lot of useless charts. All I did was read through the sparse words that were there and found they had little meaning also. These supposed experts need to lose their charts and start saying something different that makes sense or just STFU.

charts are irrelevant in a rigged market , fundamentals are irrelevant in a rigged system … when gold and silver fall on the announcement of more QE you know that market forces are being interferred with … the printing of enormous amounts of money should make all prices rise and especially precious metals … no one can predict price in this market … you either believe the fraudulent system will eventually crash and you stack for that day or you dont believe it will crash and get the hell out ….

The biggest problem with most of these “experts” is that they cannot resist the temptation to say “when” their predictions will come about. None of us knows WHEN the S will HTF but we do understand that the wheels are coming off this cart and we are headed downhill. A wreck at some point is pretty obvious but when that will actually occur is unknown. Avoid anyone who says that they KNOW when it will happen because they don’t and claiming that they do only shreds their credibility.

Having disposed of that, I can now move on to my favorite GUESS about WHEN the S will HTF. IMHO and for no other reason whatever, I am looking at sometime in 2014-15 as being the Time of Testing. Much of this will involve economic disaster because a blatant lie cannot be maintained forever and the current house of cards economies that exist in the world today are based on lies. Their framework is filled with termites who have burrowed deep and bred profusely… high frequency trading, LIBOR rigging, client assets stolen, apparently with court approval, PM manipulation, interest rate manipulation, rising inflation thinly disguised by Gov and Fed BS, high and persistent unemployment, falling take-home pay, etc. on and on.

Part of it will not be economic and that is the part that sends chills up and down my spine at night. War is likely… perhaps even very likely… and there is no way of knowing what kind of weapons will be used or upon whom. Chemical weapons certainly, biological weapons maybe, and even a small chance of nukes in the Middle East. Martial law will be declared in many places where we would not expect, most likely for the purpose of maintaining civil order but perhaps also to quell protests and keep them from becoming full-blown insurrections.

Well, whatever happens, it is likely that the next 2-3 years will be a VERY interesting time to be alive. Our Chinese friends say that.

Duck Vision your point about agendas is well made. It seems that every one who has a point of view is announcing it at the top of their lungs. Sometimes it’s best to follow the money, as in subscriptions to newsletters, to guage the reason for these jackhammer prediction announcements. There is one thing I can glean from this. Things are getting serious when so many people are shouting. Whether they are right or wrong, the house is on fire.
Ed B I usually call it like it is. You are right that by any traditional measures we are in a Depression. The GDP has not moved a nickel but if you adjust the GDP by inflation, we have been going backwards at 5-8% a year. The only reason there is not blood in the streets is $1 trillion is subsidy payments to needy people, 50 million on food stamps( No bread lines evident but plenty of soup kitchens) and 22% umeployment. Federal deficit spending at $1.3 trillion a year buys a great deal of buffering against the cold cruel realities of our economic conditions.
Off topic, I was doing a bit of research on Social Security. Many of us are close to getting SS or receiving it now. My wife just applied at 62. The SSA is running a multi billion dollar deficit with only 1.67 tax payers to each recipient. It used to be 3, 5, 15 and even 30 payers to each recipient. You can start taking SS payment at 62 . Reading Kiplinger, the latest article suggested that one wait until 66 or even 70 to start collecting. The difference between taking $1,500 now or $2,670 at age 70 seemed to be a good idea. For each year you give up payments you get 8% more the following year.
I disagree with this thinking. We have 8% plus inflation now. If you take $1,500 today and adjust it outwards for 8 years, waiting to pull the trigger, your $2,670 will have no more buying power than the original $1,500. Unless you know the year of your demise, waiting to get the money the government took from you may be unwise. If you wait 8 years, giving up the SS payments for that time period, it is very likely your real income will be no greater than if you took it at age 62.
There is a certainty that in the next 8 years we will see some serious intrusion into this system with increased income means testing, higher tax rates, means testing against net worth and even something as serious as forfeiture of benefits for reasons as specious as being too wealthy or having too high an income. Just as the AMT hits the middle class very hard, the notion that someone has ‘too much’ of something, therefore giving the government the excuse to remove, reduce or withhold benefits, it’s best that a person pull that trigger earlier than later.

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